Cardano (ADA) has been sliding steadily since early December, dropping below the critical $1 mark. This extended dip has left many investors questioning ADA’s recovery potential. Despite the uncertainty, long-term holders (LTHs) could play a crucial role in stabilizing the asset and aiding its rebound.
Declining Investor Activity on Cardano
Investor participation on the Cardano network has seen a significant drop. The number of active addresses is declining, reflecting growing hesitation among traders. This reduced activity suggests many have stepped back, leading to lower market liquidity.
Lower liquidity adds challenges to ADA’s recovery efforts. Without active short-term traders, the altcoin struggles to regain upward momentum, leaving it vulnerable to further price dips.
The Role of Long-Term Holders (LTHs)
Despite reduced participation from short-term traders, Cardano’s long-term holders offer some optimism. The MVRV Long/Short Difference currently stands at 41%, indicating LTHs are significantly more profitable than short-term holders.
LTHs, known for their resilience in volatile markets, provide stability by avoiding panic selling. If they maintain their positions, they could help ADA hold above critical support levels, creating a foundation for recovery.
ADA Price Prediction: Will It Reverse Losses?
Currently priced at $0.89, Cardano is clinging to a crucial support level at $0.87. Maintaining this support is vital for ADA to regain upward momentum and aim for the key $1.00 milestone.
- A Break Above $1.00: Flipping $1.00 into support could pave the way for ADA to target $1.23, restoring investor confidence and signaling a potential uptrend.
- Risk of Breaking $0.87: Falling below $0.87 could push ADA to $0.77 or lower, invalidating the bullish outlook and deepening losses.
For Cardano to reverse its recent declines, holding the $0.87 support and reclaiming $1.00 are essential.
